CIFA & WCA Family African Regional Conference 2010 5 – 7 December, 2010 Nairobi, Kenya 1 st EVER!! --- REGIONAL MEETING – AFRICA!! BRINGING THE WORLD TO AFRICA OPEN TO ALL INDEPENDENT FORWARDERS! ShIPPERS and consignees have a plethora of choices to meet their transport needs. From the smallest local freight agent to the largest multinational, each shipper has to carefully consider their needs and select the best possible option for their business. For over a decade industry observers have been predicting a sea of change in the logistics business. Consolidation among freight forwarding companies, combined with the rising sophistication of supply chain solutions, IT, monitoring and tracking would lead to the establishment of a cache of dominant superforwarders capable of grabbing market share. Through aggressive price structuring and buying power these multinationals would offer an irresistible combination of low prices and reliable services, squeezing SME forwarders from the market. This revolution has, however, not only failed to materialize, but has actually begun to head in the reverse direction. The latest IATA/CASS figures, published in Air Cargo News, show that throughout the world the top 10 multinational forwarders in each region are not making the impact expected. In Europe and North America the multinationals actually lost market share to independent forwarders and in other parts of the world the situation was at best static. So why are shippers not flooding to the multinationals in numbers? And what do SME’s offer the market that the multinationals cannot match? A shipper of automotive parts in Why independents are on the rise products reach the customer exactly as specified. It would only take one mistake to wipe out any savings made by using a multinational.” Therein lies the fundamental difference in perception between multinational and SME forwarders. Many shippers cherish a personal service from their agent, rather being priority number 4,153 at a multinational. having someone on call 24 hours a day, taking a personal interest in a shipment, gives the shipper confidence that they will not let their customers down. Being available at the end of a phone, however, is not enough. To compete against the price, network and IT prowess the multinationals offer, the best SME’s are offering an increasingly sophisticated product that appeals to shippers of all sizes. “To compete with the network the multinationals offer it is vital that we build up a respected network of agents around the world. Organizations such as the WCA Family help us meet these goals and gives our customers confidence that we can meet their transport needs whatever the requirement,” said the managing director of a leading European independent forwarder. he added that his company has also added sophisticated tracking systems that allow the customer to monitor the progress of their shipment. Building good relationships with shipping lines and airlines is also vital to prevent delays in the delivery of goods. Carriers have a temptation to ‘bump off’ shipments from smaller forwarders in preference for the multinationals when capacity becomes tight. SME’s have reacted to this threat and worked hard at creating strong relations with ocean and air carriers. This has begun to reap dividends as carriers appreciate the higher yield offered by SME’s. A number of European air carriers have launched specific programmes in 2010 to attract new SME’s to their services in recognition of the growing strength of the independents. There is still, however, more to be done for the SME forwarders. There is great scope for networks of independents to act together to take on the multinational’s principle advantage – pricing. The IGLU consolidation of independent forwarders in Germany has leapt into the top 25 forwarders in Germany, according to the CASS statistics. This has given its members greater leverage with ocean and air carriers on price. By joining a respected network, such as the WCA Family, combined with the creation of a consolidated front with other SME’s for negotiating prices with carriers, the independents can remove the multinationals final advantages – network reach and cost. SEP 20 2010 SERVING ThE INDEPENDENT FREIGhT FORWARDING COMMUNITY No.011 Germany explains why he selects an SME forwarder as his major transport partner and the benefits he perceives he gains from a bespoke partner. “We have used multinational forwarders and local agents to meet our needs. We have now settled on sending the majority of our shipments through what we term as ‘our logistics partner’. They offer a tailor-made service and feel that they have a stake in the success of our business – that is a vital asset for us. If our agent cares as passionately as we do that our customers receive the best possible service it is a win-win situation. The small additional cost is far outweighed by the care taken in ensuring our